Resilient in tough times

A "recession" hasmany definitions. One definition isthat it is a significant decline in the economic activity spread across the country, lasting more than a few months. The signs of recession are normally reflected in the decline in the real Gross Domestic Product (GDP) growth. Analysts say that a global growth rate under 2% is tantamount to a recession and most predict that the global economy would grow by only 0.9% to 3% in 2009, the lowest in years. Countries around the world saw their economies contracting, and most attempted to move their economies out of recession by increasing government spending to stimulate economic activities. Other countries responded by encouraging investments through incentives and tax cuts. Companies around the world have their own ways to survive the global recession affecting their markets and some of them offered their valuable advice. Flexibility and process improvement LANXESS, a specialty chemicals company based in Leverkusen, Germany, has felt the full force of the economic slowdown since November 2008 with all its business units impacted. Milan Vignjevic, Head of Semi-Crystalline Products Business Unit of LANXESS identifies two groups of factors that affected the company in these times of global economic slump. "On the sales and revenue side, there has been a sudden collapse of demand from our main markets, such as automotive and electro/electronics. Customers have simply stopped buying, leaving producers to face sluggish sales. Another impact comes from the build-up of raw materials in the supply chain. As a result, producers suffer the painful devaluation of their expensive inventories, which adds to the burden of already low revenues." Despite the global recession, LANXESS achieved a solid earnings performance in 2008. It also met its 2009 targets one year ahead of schedule. In the first quarter of 2009, cash flow climbed by EUR 77 million to EUR 122 million.

Mr. Milan Vignjevic Head of Semi-Crystalline Products Business Unit LANXESS AG Tel: +852 3526 8868 E-mail: milan.vignjevic@lanxess.com Website: www.lanxess.com

" To manage the current crisis while positioning the business to capture opportunities when the economy rebounds, companies have to work in parallel on two fronts: short-term operations optimization and mid-term execution of earlier defined strategy. " LANXESS responded to the global economic challenges with flexibility and speed. A "Crisis Management Team" headed by Chairman of the Board of Management Dr. Axel Heitman was formed to continuously analyze the market situation and formulate appropriate actions. In January, the Innovation Group Function was created to focus on efficiency programs, process enhancements and development of innovative technologies and products. A global package of measures named "Challenge 09" was also implemented to mitigate the effects of weak demand worldwide and strengthen the company's market position. With "Challenge 09" LANXESS aims to cut costs by about EUR 250 this year and in 2010. He stressed that to manage the current crisis while positioning the company to capture the opportunities when the economy rebounds, businesses have to work in parallel on two fronts: short-term operations optimization and mid-term execution of earlier defined strategy. As Mr. Vignjevic explained, "companies who manage the current crisis from cost and cash flow perspectives while not neglecting their mid-term objectives and strategy will be well positioned to emerge strong when the economy rebounds and enjoy healthy business growth." Re-engineering activities Few players in today's world economy can claim that they were not affected by the global financial crisis. Solvay Advanced Polymers is no exception. The company's revenues were impacted by end of 2008 and in the firstZapatillas Running Baratas